Foreign investors get fast track for Pa. projects

PHILADELPHIA—Shanghai native John Zhang had a dream: to live in the United States. Comcast had a desire: to outfit tenant office space in its Center City tower.

Both got what they wanted with the help of the Philadelphia Industrial Development Corp. (PIDC) and a federal program that links foreign investors to local projects, and, in the process, provides those investors a fast track to U.S. residency.

The federal government's EB-5 program for business visas was started 22 years ago and is being used locally to finance a range of projects, including new ramps for I-95 and a community center and apartments in Chinatown.

The area's pioneer in its successful use is PIDC, which has been an accredited regional EB-5 center for a decade, guiding investors like Zhang to local projects in need of low-interest financing.

Just how successful can be seen in the numbers, according to John Grady, PIDC president: 30 projects funded; $600 million in low-interest loans from 1,100 foreign investors; 19,000 jobs created.

The University City Science Center borrowed $20 million to help finance its $60 million start-up incubator at 3711 Market St.

"We created 457 qualified jobs," said Stephen S. Tang, the center's president. "I think the program is wonderful. We could not have done it without it."

Said Grady: "The program works in Philadelphia.

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It has been invaluable as a resource for investment . . . especially considering the economic conditions of the last five years."

The Welcome Fund - and other EB-5 programs like it - is straightforward: A foreign investor must provide financing for a project that will generate at least 10 new jobs. In high-unemployment areas such as Philadelphia, the minimum investment is $500,000. The money is lent for five years, with interest-only payments until the loan comes due. In exchange, qualified investors get a two-year temporary residency. Once a project is successfully completed and the job creation verified, the investor qualifies for unconditional residency.

The job of finding investors for PIDC falls to CanAm Enterprises, a New York firm that has vetted foreign investors for such programs since 1987. (Investors are also vetted by the U.S. Citizenship and Immigration Service.)

"The process we put these people through is very rigorous and more difficult because of the heightened attention immigration gets these days," Rosenfeld said. "The last thing anybody wants to see is some drug lord buying his way into the country.

"These are people you want in this country. These investors are highly successful entrepreneurs in their own countries. They are hungry and motivated to be successful here."

His firm, which is paid a fee for the loans it facilitates, also scrutinizes the projects seeking help, he said, to ensure investors are protected as well.

"Our mission is twofold," Rosenfeld said, addressing his comments to potential investors: "Protect your immigration and protect your money. The U.S. program is about job creation. If the project you invest in does not create those jobs, you can be deported.

"And we understand $500,000 is not play money. We want to do everything we can to make sure you get that money back."

That diligence attracted Zhang to the PIDC program. Like many potential investors, he was wary of being drawn into a dubious project. The U.S. Customs and Immigration service reports investors have been scammed by less-than-reputable loan projects that have falsely claimed to be part of the EB-5 program.

"I searched the Internet quite a lot," Zhang said of his decision to invest through PIDC. "After an intensive search, I found the PIDC program worth a try."

He felt as a governmental agency - PIDC is a quasi-public entity - PIDC was more likely trustworthy. And he certainly saw no reason not to invest in Comcast.

"I had no hesitation to invest my money with Comcast," he said.

His trust was well-placed. He has been fully repaid for his loan and received permanent residency for himself and his family in 2009. The owner of a Japanese animation company, Zhang, 55, now lives outside Washington with his wife and two daughters.

"This is my dream country, where I wanted to go since I was young," he said. "Now, this is my land. I want to stay here forever."

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